Your issue is that the dimmer is not rated to handle the type of fixture/lamps its controlling.
From a lighting control standpoint, the 12V-lamps classify as "low-voltage halogen" and, somewhere in that circuit, have a transformer(s) converting the 120V~ down to 12V~. Using incandescent dimmers (like the one you are using) can cause compatibility issues with those transformers. What I suspect is happening is that the incompatibily is either throwing voltage spikes or current spikes on the line which are causing the dimmer to enter some sort of "safety" mode to shut everything down before any problems occur.
My recommendation is to first figure out what type of transformer it is: Either magnetic low-voltage, or electronic low-voltage. Ideally you would contact the transformer manufacturer (or look up their specs online) to figure that out. Other rules of thumb: if the transformer's big & bulky, it's probably magnetic - conversely if its lightweight, it's probably electronic. If its only one transformer controlling all of the lamps together, it's probably magnetic - conversely if its one of those transformers where the transformer and light bulb come togheter as one assembled unit and then snap into the track, it's probably electronic.
Then make sure the dimmer is rated for magnetic low-voltage, or electronic low-voltage (depending upon what the transformer is).
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